What Obamacare will mean for us

If you read this in print, skip here for the stuff that didn’t make the paper.

Health services are the third largest industry in the US (after oil and retail), and in RI it’s the largest single industry. That means a lot of bureaucratic momentum, and a lot of conflicting interests. It’s not really surprising that we’ve ended up with a system of co-pays, HSAs, premiums and exceptions that seem to work like a multi-dimensional Rubik’s cube.

I began looking into the new laws surrounding health care more than a year ago. I couldn’t find anything that spelled out how the Affordable Care Act (ACA) would actually work or what, on a practical level, was likely to change. There was a lot of rhetoric – a lot of people saying it was a horrible, frightening thing; others saying it was the greatest change in health care since the Band-Aid. You heard some of this – the sound bytes circled the web and media like binging landsharks.

But I had a lot of trouble finding out why people on either side of the debate held these opinions. Any factual analysis was lost between accusations of socialism and profiteering. How it would really affect base level participants didn’t seem to be on anyone’s radar.

I tried reading the document itself. Good luck with that. On the official HealthCare.gov site, you can drill down to find different versions of the law (full text, and official text) – the “official” one is 2,400 pages, while the “full text” is only 947. “Whew,” I thought, going for the 947 page version. “I just saved myself 1,450 pages.” But, like any good legal document, even the short version is pretty much indecipherable.

So, clearly, I needed help. Although the act was signed into law in 2010, it seemed like no one was prepared to talk about its everyday impact in concrete terms until recently. In 2013, provisions from the act really started to kick in and affect some people’s day-to-day lives.  Fortunately, that’s also when help started springing up. Insurance companies, HealthSourceRI, and other organizations are now equipped to explain the new options available.

The Affordable Care Act, also nicknamed “Obamacare,” is intended to universalize health insurance access for Americans by making it less confusing, more affordable, less exclusive, and mandatory.

Less confusing: Online Health Exchanges now provide a single gateway to multiple plans from multiple providers, so people can compare plans and do their research and sign-up faster and more easily. Each state had the option to create its own exchange for in-state use, or use the national one.

It won’t surprise anyone that RI chose to create its own exchange. The first to declare independence and the last colony to join the new union, Rhode Islanders don’t like being told what to do. Massachusetts and Connecticut also chose to create their own – in Massachusetts, it’s called the Health Connector, and it’s a retooled version of a program that’s been in place since 2006. In Conn, it’s called Access Health CT.

In this case, going independent looks like a bet that’s paid off. The national site has been plagued with high-profile glitches. The local exchanges have not. “I advise people to ignore all the press about the national site,” says Russell Gussetti, one of the founders of Tune In, Tune Up RI, (see sidebar). “It’s just background static – loud background static, but it has nothing to do with the options available locally.”

“The RI Exchange has actually received very positive reactions in the national press,” says HealthSourceRI spokesperson Dara Chadwick. “We had some capacity challenges initially, but we are very pleased with how the site’s been working.”

I went in to register using the HealthSourceRI site. It was pleasantly clear, and the options presented were easy to understand. I did have trouble getting my identity verified – the system rejected me and asked me to call in. The call was answered immediately by a woman who offered to help. After a few tries, she gave up and sent me to another number – but she was pleasant about it. It seems there are just too many Mike Ryans in the world, and somewhere in the government’s cyberspace there are serious concerns about the difference between “Mike” and “Michael.” “There’s a lot of fraud going on,” my operator told me apologetically. I went back to the website, and entered a few different spelling variants on my name and address, until I found one that the system agreed could be a real person. Ah, success.

From there on in, it was mostly about my age, income, and whether I wanted a bronze, silver, gold or platinum plan. Factors like gender and health history no longer matter.

Motif contributor and local musician and performer (harpist and hula dancer, among other things), Sarah McGinnis, had a smoother experience. “I was done in about 15 minutes,” she said. “It was much, much easier than I thought it would be.

RI’s investment in its own exchange – which ran in the 10s of millions of dollars – includes staff to handle the phones and a walk-in consultation center at 70 Royal Little Drive in Providence.

Affordable
For most people, especially those earning less than $45,000/yr as individuals, the new options should definitely make insurance more affordable. If you were in a line of work where you didn’t have an employer, there were hurdles both in finding individual health care and in affording it, which are now removed. Many individual artists joined unions (like SAG, the Screen Actors Guild) in large part for access to group healthcare plans. The exchange definitely is helping solve these access issues.

“There were 120,000 RI residents without health insurance,” says HealthSourceRI’s Chadwick. It’s going to take time to reach them. As of December 28, 9,803 people had signed up through the exchange – the majority qualifying for low-income considerations. “I think we’re #2 in the nation right now, for meeting our target numbers,” says Chadwick. “We’re pleased. It’s a challenge to get the word out about something completely new, and we expected it to be.”

The new law also requires all insurance plans to fully cover primary care visits and basic diagnostic lab exams, free of charge or copay. These changes have already gone into effect, if you have current insurance.

I tried to figure out one of the most confusing aspects: How are these price reductions being paid for? That, it seems, is a tricky question. Nothing in the ACA addresses the root costs of health care. All the parties involved – physicians organizations, hospitals and insurers – seem to expect to be squeezed by the system in coming years.

In the short term, the answer seems to lie in a complex set of federal incentives delivered through the exchanges and to insurance companies and medical care organizations, as a reward for meeting numerical goals – goals related to overall health, to keeping costs down, and to serving their members/insureds/patients. It’s all spelled out in that 2,400 page document. The good news for consumers is, that’s all behind-the-scenes activity that we don’t have to keep track of.

Long term, the system relies on a solid number of healthier people signing up, to supplement the system overall for those with more expensive health issues. That’s where accusations of socialism come in – some healthier people are inevitably going to get less from the system than less healthy ones. It would be an incentive to opt out for healthier people – if only you knew that you’d stay healthy. But that’s the nature of insurance – it’s risk reduction. No one really knows when an unexpected accident or health event will happen. It’s a game of roulette we all play together.

Fears that doctors will stop taking insurance, or provide lower quality care because reimbursements are likely to be lower, have yet to be borne out – the next couple of years will be revealing. Blue Cross reports no reduction, so far, in RI physicians accepting health insurance.

Less Exclusive
Not long ago, the insurance companies themselves preferred to sell insurance in large blocks through employers. There was little incentive to make plans simple – most of them had HR representatives on the company side, and part of that job was to be the only one who actually understood the plan. That’s likely to change, too. Blue Cross Blue Shield of RI still offer some plans you can’t get through the exchange – but a number of plans have been modified to work with the exchange and more simply address consumers.

“This seems like the beginning of a shift in the insurance model, from a B2B (Business to Business) relationship, toward a B2C (Business to Consumer),” says Blue Cross Blue Shield Assistant Vice President of Public Affairs Stacy Paterno. “We opened our first retail store as a pilot effort in Warwick [at 300 Quaker Lane] this year. We found that some people really need that face-to-face conversation to help figure out the best options for them.”

Another significant change is that you can no longer be disqualified for a pre-existing condition. I remember taking a physical when I changed employers many years ago. It felt like a pass-fail test, rather than a real look into the condition of my health. I just kept hoping they wouldn’t find anything. I didn’t think I had a pre-existing condition, but I really didn’t want to find out.

That anxiety, and potential for disqualification, are no longer a part of the current formula.

Mandatory
Well, first off, this isn’t really true. You can still not have health insurance if you really want to. But you’ll end up paying into the system nonetheless, just through a back-door manned by the IRS. Those without health care by the end of March will pay a tax penalty equal to 1 percent of income, or $95, whichever is more. Those amounts go up by a percentage point in 2015 and 2016.

This is a sore point for opponents of the ACA, who express frustration at being penalized if they choose not to insure.

Health care may be particularly expensive in RI

The ACA uses a complex network of incentives, mostly invisible to the average health care consumer, to try to make insurance more affordable. And even with that, it won’t necessarily be more affordable for everyone. Insurance in our part of New England seems likely to be higher than in other states.

I asked Blue Cross Blue Shield spokesperson Stacy Paterno if increased federal regulation was going to put a strain on BCBS of RI, or cause prices to go up – as some states are reporting.  “That aspect isn’t really going to impact us,” she said. “Rhode Island is already pretty heavily regulated, so we don’t expect we’ll have to change much to keep up with the federal requirements [in that regard].”

In recent years, Rhode Island consistently ranks as one of the least business-friendly states in the US. One of the reasons is the amount of regulation businesses are subjected to. But in this case, it looks like our often excessive bureaucracy was solid preparation for the national version.

According to the RI GOP, another reason health insurance is more expensive is that Rhode Island has among the most aggressive mandates for what must be included in insurance plans. “In vitro fertilization is a must-include, for example,” says a GOP spokesperson. “I have no problem with in vitro, but it, like a lot of the other things covered, seems more like a luxury than an emergency that must be covered.”

Health care reform through your employer

For those not self-employed, there are some interesting side-effects of health care reform that come into play. The first is, through the new health exchange, employers can easily sign up for “employee choice” programs, where the employer agrees to fund up to a certain amount, but employees can choose a higher plan if they’re willing to pay the difference themselves. With many employers, especially small and mid-sized ones that couldn’t afford to spend a lot on benefit management, this was not an option before, so it’s a good change, although not all employers are selecting to offer it.

Why would any employer not want to offer employee choice, since it doesn’t cost the employer any extra? “Some just aren’t ready,” says Blue Cross Blue Shield’s Stacy Paterno. “It’s a big shift.”

“It’s always hard with something new,” agrees HealthSourceRI’s Dara Chadwick, who expects employee choice to grow in the future.

Another side effect: The new laws set the threshold at 30 hours a week for an employee to be offered health insurance by the employer. In response, some not-quite-full-time jobs are being cut to 29 hours a week to avoid the health care mandate. That represents a loss of income for those employees.

Investor’s Business Daily – admittedly, not the most politically impartial source – maintains a list of employers who  cut jobs or limited some classes of employee to two hours a week or fewer in response to the new health care mandate. http://news.investors.com/politics-obamacare/121913-669013-obamacare-employer-mandate-a-list-of-cuts-to-work-hours-jobs.htm. There are hundreds of employers listed, but none from Rhode Island or Connecticut, and only one from Massachusetts, and that one subsequently changed its policy.

Right now, it’s a buyers’ market when it comes to most employment, especially unskilled labor. This sort of adjustment to hours can be expected, and it’s not illegal – it’s a company cost-control tactic, and we’re sure to see it in some places locally – there’s anecdotal evidence it’s happening already. On the upside, the ACA makes it easier to afford the health insurance. Whether that makes up for lost hours will depend on the individual’s situation.

Overall, the recent changes hold a lot of promise, especially for those who couldn’t access health care before. But there’s still a lot to address, as much of the 1.7 trillion dollar a year health care industry and its relationship to jobs and taxes will continue to be a complicated beast. The Rand Corporation, a consulting and data tracking organization that conducts national opinion polls on political topics, reports that as the ACA moves further into its implementation, public opinion is actually swinging more in its favor. It’s still by no means a clear win, but if approval numbers are going up as people actually interact with the system, that seems promising for the success of the ACA. Much national press has been devoted to Obamacare as this president’s major legacy, and as a tenuous one that could fail if not enough people sign up. Whether the new regulations need tweaking or massive overhaul, it seems like having this now-implemented overhaul crash and burn is unlikely to help anyone. Like the recent short-term shut down of the federal government, failure will likely be a lose-lose-lose situation for most. One question I asked of all the local experts I consulted was, if the national system doesn’t hold up, what happens to our local system? No one was able to address that question. Let’s hope we won’t have to find out.

Read opinion pieces:

The future of health care

Employers and health care – should employers be responsible for your health? 

Bare Bones

What you should know if you don’t have insurance:

Ignore the national hoopla.
RI, Conn and Mass each have their own exchanges, so if the national one is broken or has long waits, which makes it into a lot of the media, it doesn’t matter. Treat it like the background noise it is. accesshealthct.com for Conn, healthsourceri.com for RI, mahealthconnector.org for Mass.

You have until the end of March.
Although much was made of January 1 deadlines, you actually can still sign up until March 31. After that, the exchange will be closed to individuals until November (businesses can still register).

You can play with the website.
You can use the RI Exchange anonymously to price shop before committing to anything or letting them know who you are.

You will pay NOT to have insurance.
There will be a penalty on your taxes if you don’t have insurance. It’s not much at first (1 percent of your income, with a minimum around $95, for 2014), but it’s going up each year.

You can get help in person.
Phone support is available, and random tests by Motif found almost no wait time. There is also a physical center prepared for “retail support” (I’m thinking of it like the stores a lot of wireless phone companies have).

You can get free plans.
… If your income is low enough. We all love free stuff. The threshold is around $15,000 per year for an individual, although HealthSourceRI didn’t want to go on the record with that number – they encourage you to call or chat online to confirm your threshold (it may go up on dependents, source of income, etc.).